• NOTICE OF DISCIPLINARY ACTION

      • #
      • CBOT 10-04523-BC-3
      • Effective Date
      • 25 January 2017
    • MEMBER:

      Kelly King

      CBOT RULE VIOLATIONS:

      Rule 521. Requirements for Open Outcry Trades

      In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.

      Rule 539. Prearranged, Pre-negotiated and Noncompetitive Trades Prohibited (in part)

      A. General Prohibition

      No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.

      (Legacy) Rule 432. General Offenses (in part)
      CBOT

      It shall be an offense:

      B. To engage in fraud, bad faith or in conduct or proceedings inconsistent with just and equitable principles of trade.

      FINDINGS:

      Following an evidentiary hearing on the merits on December 19, 2016, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on multiple occasions between April 2009, and May 2010, Kelly King (“King”), a broker in the Corn futures pit, violated Exchange rules. Based on the evidence presented, the Panel specifically found that while the subject trades were reported and cleared as having occurred between King and locals in the pit, the trades were not competitively executed via open outcry. Accordingly, the Panel determined that King violated CBOT Rules 521, 539.A. and (legacy) 432.B.

      PENALTY:

      Based on the record and the Panel’s finding and conclusions, the Panel ordered King to pay a fine in the amount of $35,000. The Panel further ordered that King be suspended from access to any CME Group trading floor and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group, including CME Globex. The suspension shall begin on January 25, 2017, and last six months from the date the fine is paid in full.

      EFFECTIVE DATE:

      January 25, 2017